Occupier take-up in London’s office market during Q1 2017 was 37% down on Q4 2016 at 2.2m sq ft, according to the Cluttons Quarterly bulletin.
It said that headline rental values and capital values have remained largely stable, but this masks the fact that net effective rents continue to dip due to a rising number of lease incentives being offered by landlords.
Ralph Pearson, head of UK commercial agency at Cluttons, said: “Clearly occupiers are nervous, but there are those willing to be bold and make decisions. This attitude is more prevalent among non-European firms and has fuelled, for instance, the hunt for 500,000 sq ft of space in the City this year.”
Cluttons head of research, Faisal Durrani, said: “Undoubtedly total commercial investment volumes have declined over the past couple of years, fuelled by the uncertainty around Brexit and nervousness around what post-Brexit Britain will look like”.
“That said, international investor appetite for Central London offices appears to have strengthened in recent months, with the proportion of total overseas investment into the capital’s office sector surging past 80% during Q1 2017, compared to just 59% in Q1 2016.”
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